Market movements and pensions: how to support your employees through the fluctuations
With market movements making the headlines lately, some of your employees may be worried about what this means for their pension.
Here’s how you can help employees take a step back and consider what they can control.
When financial markets fluctuate, it’s natural for your employees to worry about how this might impact their pension.
It can be unsettling for them to see the value of their pension fall because of market turbulence.
At such times, it’s important for your employees to remember that it’s normal for stock markets and other investment markets to move up and down (often referred to as volatility).
This can be due to economic and political events.
And in the past, markets have shown that they can recover over time – though past performance isn't a reliable guide to future results.
What’s an example of market fluctuation?
Say an employee had invested £10,000 in the FTSE All-Share Index on 31 December 1985 (for context, at the time the average UK house would’ve cost £28,061, according to the Land Registry).
That investment would’ve had a bumpy journey, with several big events – including the September 11 attacks in 2001, 2008’s global financial crisis, and the coronavirus pandemic – prompting significant downs and ups.
Here’s a handy visual representation of that journey.
If an employee stayed invested after the big falls, the value would’ve bounced back over time and it would’ve been worth over £250,000 in 2024. But if they’d switched out of it, they could’ve lost the chance to benefit from its future growth.
So while we can’t use past performance as a reliable guide to future results, it does help to show that the longer an employee stays invested, the more likely they are to reap the rewards.
Of course, it’s one thing to think about figures like this and gain perspective in relative calm. It’s quite another when employees see worrying headlines and their pension falling in value.
It’s exactly during these times that it’s crucial for employees to focus on what will help them make informed decisions about their money.
As an employer, you’re perfectly placed to provide them with support that can help them build their financial resilience and feel more in control.
Here are some ideas to get started.
Supporting employees through market movements
The foundation of making good financial decisions is knowledge.
This boosts confidence and can help to ensure that employees consider all the relevant factors when making decisions about their day-to-day and future finances.
For example, history has shown that over the long term (usually more than 10 years) markets have risen in value.
If you panic and sell, however, you’re likely to be selling after markets have already fallen and importantly, before a potential recovery. So you’d be accepting your losses.
Even knowing simple things like this might help to influence positively some employees’ financial decisions.
You can help boost employees’ knowledge by pointing them towards free guidance such as MoneyHelper, Pension Wise, and The Money and Pensions Service, which cover a range of pension and retirement topics.
Standard Life workplace pension scheme members can also sign up to its Good Money Mood webinars to help power up their knowledge.
Together, these measures can help to ensure that employees make informed, considered decisions about their pensions and finances, based upon what is best for their medium- to long-term financial security – not according to the most recent headlines.
The information in this article should not be regarded as financial advice and is based on our understanding in May 2025.
Remember that the value of pension plans and other investments can go down as well as up and your employees may get back less than was paid in.
Supplied by REBA Associate Member, Standard Life
Standard Life are part of Phoenix Group, the UK’s largest long-term savings and retirement business. We both share an aligned ambition to help every customer enjoy a life full of possibilities.
